Liz Sweigart

If cash is king, why is it treated as a by-product rather than a focus? I argue that the most important thing to look at in evaluating business performance is cash accessibility, or the ability of a company to use its free cash when and where it needs it. Businesses may have cash tied up in different places for a variety of reasons — often having to do with currency restrictions, banking regulations, and taxes — which can compromise cash accessibility. […] Most companies do not have a handle on how accessible their cash is because their data collection and their reporting functions do not consider it a priority. […] Because the focus has traditionally been free cash flow, as opposed to accessible free cash flow, no standardized financial reports, ratios, or metrics exist to measure or assess it.

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterGoogle+Share on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.